The Rising Three Methods and Falling Three Methods are five-candle continuation patterns โ they signal that the existing trend will continue after a brief pause. Unlike most candlestick patterns, these confirm the trend rather than predicting a reversal.
Pattern Structure
Identification Rules
| Candle | Rising Three Methods | Falling Three Methods |
|---|---|---|
| C1 | Large bullish candle | Large bearish candle |
| C2, C3, C4 | Small bearish candles within C1 range | Small bullish candles within C1 range |
| C5 | Large bullish candle closing above C1 high | Large bearish candle closing below C1 low |
Trading the Three Methods
Rising Three Methods Entry:
Entry: Buy on the close of C5 (the large green candle)
Stop Loss: Below the low of the three small red candles
Target: Continuation of the trend โ use ATR-based trailing stop
This is a trend continuation signal โ the pullback has ended
Entry: Buy on the close of C5 (the large green candle)
Stop Loss: Below the low of the three small red candles
Target: Continuation of the trend โ use ATR-based trailing stop
This is a trend continuation signal โ the pullback has ended
The Rising Three Methods on the NIFTY 50 weekly chart after a correction within a bull market is an extremely reliable signal to add to long positions. The three red candles represent normal profit-taking โ the C5 large green confirms the bull trend has resumed.
